The Hindu Business Line : Harrisons Malayalam turns into multi-crop plantation firm

“Under-utilised land amidst the plantation crops is used to grow a variety of crops which require no additional land or labour.” – Pankaj Kapoor, MD

C.J. Punnathara

Kochi, June 4 Over and above its strong presence in tea, rubber and coffee, the increasing area under crops such as banana, pineapple, passion fruit, pepper, cardamom, cloves, cocoa and cinnamon is transforming Harrisons Malayalam into a multi-crop plantation company.

Ploughing back

While the total income of the company grew by 42 per cent to Rs 291 crore in 2008-09, much of the revenue was ploughed back into the land through replanting of large areas under rubber and infilling in the tea plantations, said Mr Pankaj Kapoor, Managing Director, Harrisons Malayalam.

The company, which was contemplating entering into the plantation business in the North-East, has now decided to focus and upgrade production in the South plantations.

“Our tea estates are interspersed with silver oak which are grown as shade trees over which pepper wines are being cultivated. Under-utilised land amidst the plantation crops are also used to grow a variety of crops like banana, pineapple and passion fruit which require no additional land or labour and very little additional input like fertiliser or pesticide,” Mr Kapoor added.

Value-addition

Value-addition from the multi-farious crops is also shoring up the revenue side.

Pepper, cardamom, cloves and cinnamon are already being sold in small packs, ideally suited for the retail trade. Pineapple and banana are being marketed as table-top fruits due to high prices that they continue to fetch.

Once more areas are brought under these horticultural crops and if and when the prices drop the company might consider going in for value addition and entering into the retail segment.

Passion fruit is also sold as a fruit, which is then converted into jams and squash.

The company could explore value addition to this segment, when the area and volumes pick up.

Long-term investment

Though the company’s revenue shot up last year, much of it was not reflected in the profits due to long-term investment into land.

Buoyed by an international surge in commodity prices last year, the returns from rubber rose by 40 per cent while those from tea were up by 38 per cent.

Another reason was the surge in bought out operations where by the company bought tea and rubber from outside, which were processed in their factories and then sold.

However, the long-term wage settlement arrived between the workers resulted in wages for rubber workers growing by 38 per cent, while for tea workers were up by 26 per cent.

Quality testing lab

Besides the investment in land, the company has also been upgrading its infrastructure and technology and improving the quality of its products. Harrisons Malayalam has set up a quality testing laboratory at Coimbatore which is not only testing the products from its own plantations, but also those from the international market, grading them and generating their chemical profile.

The company is now trying to improve the quality of their teas and bring them on par with the chemical profiles of other international teas.

It has also set up two automated technology driven orthodox tea factories at Vandiperiyar and Wyanad in Kerala with individual capacity of 50 tonnes a day.

Though the entry into a diverse crop basket was partly an attempt to de-risk the business from wild price fluctuations in individual commodities, it has begun to pay other rich dividends as well.

With the introduction of pepper, fruits and other spices into the under utilised land the revenue from the land has gone up handsomely — by as much as 50 per cent in some estates, Mr Kapoor said.

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